Seeking to keep business flowing for partners amid a sharp contraction in IT spending triggered by the coronavirus crisis, Ingram Micro has launched two new financing programs for North American partners.
Combined, the dual initiatives will extend $100 million of supplemental credit to some 1,800 resellers in the U.S. and $10 million of additional capacity to about 200 Canadian partners.
Called the Future Funds program, the first of the new programs allows end customers to make interest-only payments on new technology purchases for six months, after which they can either roll the money owed into a traditional financing contract or pay the balance in full.
“It really gives the end user a lot of flexibility,” says Melanie DelValle, senior manager for financial solutions at Ingram. “They don’t have to commit to the terms and conditions right up front on day one.”
Partners benefit as well, she adds, by collecting the full value of a deal immediately. “They don’t have to wait until month six or seven, when the customer makes the decision on how they want to pay for that. They’re able to recognize that revenue up front and increase their cash flow.”
The other new program, called KickStart Financing, augments the credit lines of selected partners and extends their credit terms to 45 days. Ingram has enrolled all members of its Trust X Alliance and SMB Alliance partner communities in KickStart, along with hundreds of other resellers in good standing who are running up against their current borrowing limit.
Many of those companies are active in markets experiencing unusually strong demand at present due to the COVID-19 outbreak, like healthcare solutions, work from home technology, and security systems. “We’re really using a lot of science behind this and a lot of business intelligence to help us make the right decision” about who gets credit, says Anthony Mackle, senior vice president and chief finance executive for the U.S. and Latin America at Ingram.
According to DelValle, the Future Funds program is currently set to expire on June 30th, but is subject to renewal if needed. “Would we absolutely extend that to Q3 and Q4 if the crisis continues? Yes,” she says.
The extra capacity and longer terms provided to resellers through KickStart, on the other hand, are permanent. “As long as they use it and they’re in good standing, we’re going to continue to support them with that additional credit line,” DelValle says.
KickStart and Future Funds are two of several recent moves by Ingram inspired a coronavirus cash crunch just now becoming visible in the channel. “We started to see a slowdown in payments,” Mackle notes, even though demand for cloud-based collaboration software, laptops, and other remote work tools is exploding.
Last week, in a letter to partners from Senior Vice President and U.S. Chief Country Executive Kirk Robinson, Ingram informed partners that it’s waiving fees temporarily on most financial programs. That policy, Mackle notes, applies to charges from Ingram itself for matters like transaction processing, but not to fees levied by third-party financial institutions, whose policies the distributor can’t control.